When you picture the perfect resident, you probably imagine someone with a high credit score, a full-time salaried job, and strong references from former landlords. This profile makes sense; as a property owner or operator, you want someone who can easily meet their financial obligations so that you can avoid rental income loss. However, this isn’t the only type of individual who can make a great renter.

Often, renters are turned down based on a small number of criteria that may not provide the full picture of their financial situation. For example, they might be a first-time renter, a student, or an international renter without a credit history or Social Security number.

Perhaps they have a non-traditional job, such as gig work or freelancing, or are simply low on move-in funds. While these issues do warrant consideration, there are easy ways to mitigate any financial risk. Plus, measures like credit scores may not tell the whole story when it comes to someone’s inherent liability as a resident. Below, we’ll go through five different non-traditional renter personas and why they may actually be your next fantastic resident. We’ll also share some ways to reach these potentially valuable markets while also easing your own financial worries.

Renter One: Meet Colette

On the surface

College is a 19-year-old student with no credit history and no income.

The full story

Colette comes from a wealthy French family and is living in Nashville while studying to be a cardiologist at Vanderbilt University.

Any owner or operator who rents to students knows there’s some risk involved. They’re typically young, inexperienced, and not necessarily responsible. Many are first-time renters, which means no references. Usually, they have little to no credit history and either no income or minimal income from a part- time or work-study job. Also, they may be more likely to break their lease to study abroad or take time off.

In short, they’re in college. Still, the student rental market is huge. As of 2020, 8.6 million students needed rental housing near their college campus.

Purpose-built student housing owners and operators and those with rental portfolios in college towns can’t really afford to miss out on this demographic. And while the “party animal,” irresponsible college student stereotype is hard to shake, it doesn’t necessarily reflect the truth. Many students, especially those looking to go into demanding fields like medicine, take their education extremely seriously. Rigorous academic programs, like the pre-med program Colette would be enrolled in, require long nights of studying rather than partying. In addition, many students have family members who are willing to help out financially or serve as a guarantor. Even those students without family support can secure their lease with TheGuarantors’ Rent Coverage insurance, which helps mitigate risk in case of rental default. In addition, our Deposit Coverage is a great alternative for cash-strapped students and their families; students pay a single, small fee to cover a traditional security deposit, saving them money upfront while helping to cover any potential damages to your property.

Should you rent to Colette?

With the above safeguards in place, property owners and operators who rent to students can reduce their risk while increasing their pool of responsible.

Renter Two: Meet Raj

On the surface

Raj is new to the United States and has no Social Security number, credit score/history, or family to act as a guarantor.

The full story

Raj just secured his dream high-salary position at a US-based company and is looking for a long-term rental that’s close to his new workplace.

The United States has always been a melting pot, and immigration to this country is rebounding as the COVID-19 pandemic wanes. Each year, more than one million people emigrate to the U.S. as work- and student-visa holders, refugees, or direct relatives of citizens. For these new arrivals, the rental market is critical. Without credit history or a Social Security number, they can’t apply for a mortgage. For those like Raj who come to the U.S. for a job, long-term rentals are preferred, and many plan to apply for permanent residency or citizenship.

While this is a highly valuable market consisting of millions of potential residents, leasing to international renters comes with hurdles. One is that you can’t run a credit check. Another is the lack of a U.S.-based cosigner or guarantor. However, both of these issues can be solved with our Rent Coverage product. TheGuarantors serves as the renter’s cosigner, giving them access to the apartment of their choice and increasing your protection from any potential rental income loss.

Should you rent to Raj?

With these relatively simple workarounds, there’s no reason to write off international renters as too risky. You may very well find your best renters within this group.

Renter Three: Meet Tyler

On the surface

Tyler has a low credit score that makes him too much of a risk.

The full story

A few years ago, Tyler was the victim of identity theft and is still working to correct his credit report and repair his reputation. Credit checks are a useful tool for assessing renter risk, but they’re not without limitations. Each year, approximately 1 in 20 Americans become victims of identity theft, and 34% of consumers have some kind of error on their credit report. Fixing those errors doesn’t happen overnight, either, with the typical credit error taking about 30 days to correct.

Before rejecting a credit-challenged potential resident outright, see if you can learn more about their financial situation. If they have been a victim of identity theft, ask to see documentation to verify the situation. If possible, consider other methods of assessing the renter’s financial situation, such as pay stubs or bank statements. You might also consider gathering additional references from prior landlords or employers.

Should you rent to Tyler?

If you’re still hesitant, our Rent Coverage can provide you with peace of mind when renting to those with poor credit, no matter the reason why.

Renter Four: Meet Sandra

On the surface

Sandra does not have a steady job or paystub from a full-time employer.

The full story

The steady 9-to-5 office job was once the gold standard for owners and operators looking to ensure prompt rent payments. However, this type of job is becoming less common as more people opt for non-traditional employment. This might take the form of gig work (driving for Uber or Lyft, delivering for DoorDash, etc.) or freelancing (working as an independent contractor for multiple employers/clients). In fact, the share of the workforce that’s classified as “independent workers” increased 34% from 2020 to 2021. And by 2023, over half of the U.S. workforce is expected to have participated in gig work to some degree.

For the growing cohort of workers who fall into these categories, traditional measures of income and employment (like paystubs) don’t tell the whole story. Bank statements might be a better option, and it’s always a good idea to ask for references. If you want to defray some of the risk of renting to someone with variable income, you can require that they have a guarantor or cosigner (we can help with that).

Security deposits can also be a barrier for this valuable market, as freelance and gig income can be sporadic. With our Deposit Coverage product, freelance renters only need to pay a small fee at move-in, and you get additional protection from damage to your rental.

Should you rent to Sandra?

Don’t ignore freelancers and gig workers because they don’t have a desk job–this market is only poised to grow, and can offer a substantial area of opportunity for property owners and operators.

Renter Five: Meet Karl

On the surface

Karl is unemployed with zero income and no obvious way to pay the rent.

The full story

Karl spent more than 30 years working as a railroad employee and has significant retirement savings, along with a pension. “No income” can be scary words for a property owner or operator. However, some potential renters have other means of paying their bills. Take Karl, a recent retiree with enough savings to easily cover the rent and then some for a long period of time. Another example could be an individual with a large inheritance, or someone with both part-time income and additional sources of funds, such as a pension or Social Security payments. Perhaps they sold a home or even a business, giving them a large, one-time payout that they plan to use for ongoing expenses.

Should you rent to Karl?

When considering a no or low-income renter, dig deeper to learn more about their financial situation. How are they planning to pay their rent? If they need TheGuarantors can play that role. If they have other sources of income, they can likely provide proof of their savings, trust fund, benefits, etc. Remember that no income doesn’t necessarily mean no way to pay.

Meet your new favorite renter

Want to qualify more renters while mitigating your risk? Worried about missing out on fantastic renters? TheGuarantors Rent and Deposit Coverage can help you qualify more renters and mitigate default risk by protecting your portfolio in case of defaults, vacancies, lease breaks, holdovers, damages, and more–all while providing non- traditional renters with the dream home they’re looking for.